TMAC Newsletter

Transit Benefit Parity Could Be Restored

03.19.2012

The transit and commuter highway vehicle (vanpool) tax benefit, which allows transit users and vanpoolers to pay for commuting with pre-tax dollars, expired at the end of 2011. As a result, the transit benefit’s maximum pre-tax amount reverted back to $125 per month from $230 per month as of January 1. As part of the Senate’s bill, MAP-21, that amount would be increased to $240 per month.

The transit/vanpool benefit is one side of a two-pronged commuter benefit. The commuter benefit also incorporates a parking benefit, which has increased in 2012 from $230 per month to $240 per month due to a cost-of-living adjustment. Transportation advocates have been pushing for benefit parity (i.e., where the transit/vanpool maximum tax-free level was the same as the parking limit).

This issue is a difficult one. With raised budgetary concerns in Washington, the transit benefit is yet another target for cuts. Unlike many other tax credits and benefits, though, this one directly impacts and improves the lives of working families. The reduction in this benefit equates to a tax increase on working families, including many members of the military who use the benefit to help them get to and from their home base. We currently have 80 vanpools registered for employees at Picatinny Arsenal in Rockaway. That equates to almost 500 commuters at that location alone that will face an increase of over $1,000 each on their commuting costs this year.

More than 50,000 letters of support for parity were sent to Congress through the website commuterbenefitsworkforus.com, and the newly-passed Senate bill contains language to renew the benefit to its previous level and include a cost-of-living adjustment.